Enterprise slowdown isn’t coming – it’s here – Marketingwithanoy

The pace at which venture capitalists deploy funding around the world, slowing again in April.

The volume of venture capital dollars, as tracked by Crunchbase News in a new report, peaked in November 2021. Since that high, the value of venture capital investments has tapped lower in most months, before dropping another $5 billion from March to April.

The Exchange explores startups, markets and money.

Read it every morning on Marketingwithanoy+ or get The Exchange’s newsletter every Saturday.

It should come as no surprise that the venture capital sector is retreating. Marketingwithanoy, for example, covered the declining valuations of startups at most stages earlier this week. Many companies that saw a pandemic boom are now undergoing a comeback, further hurting investor demand for previously popular categories, and some recent IPOs in tech sectors with high startup activity are suffering sharp sell-offs.

Subscribe to Marketingwithanoy+However, the data is important not only because it confirms our expectations of where venture activity is headed in 2022 – it also indicates that the change in the venture capital market will prove to be gradual to some extent, helping to explain why the VC data in the first quarter of 2022 was stronger than some expected. Since the slowdown in VC investment isn’t going to be a thunderclap, we expected to see more damage in the second quarter than in the first quarter, and the Crunchbase News dataset underlines the perspective.

This morning we are analyzing the latest numbers to improve grok market sentiment around the current venture capital market. Which, as you’ll soon see, is much smaller than it was a few months ago.

A mixed but meaningful dip

Despite the 12 month low, we are not seeing a dramatic dip. According to Crunchbase, the amount invested in private companies last month is only 10% lower than in March this year. The year-over-year decline isn’t huge either, with the April 2022 total just 13% lower than that of April 2021.

The decline is also nuanced when looking at different investment stages. Start-up financing has even increased by 14% year on year. But late-stage financing is down 19% year over year. While it was flat month over month, we think the last number is the most important.

Leave a comment